By Alice Uribe

SYDNEY--Insurance Australia Group Ltd. logged an almost 60% drop in full-year profit with its insurance margin falling short of guidance, as the insurer grappled with destructive weather events and market volatility amid the ongoing pandemic.

The Australia and New Zealand-focused general insurer on Friday reported a profit of 435 million Australian dollars (US$314.7 million) for the 12 months through June, down from A$1.08 billion. IAG confirmed it would not pay a final dividend.

IAG, which pre-announced its results on July 24, confirmed its insurance profit was down almost 40% to A$741 million.

Its reported insurance margin softened to 10.1%, from 16.9% on year driven partly by the inclusion of net natural peril claim costs of A$904 million. The costs were above updated guidance of A$850 million provided in February following higher-than-anticipated attritional perils experience in the final quarter of the financial year.

IAG's Gross Written Premium rose by 1.1% compared to 3.1% on year, which the insurer said in July was consistent with the "low single digit" guidance maintained throughout the 2020 fiscal year.

Write to Alice Uribe at alice.uribe@wsj.com